Justesen says the most recent boom, which started in 2004 and continued through late 2007, helped to further cement Formco's strong residential business by allowing him to make some changes in the way he did business with the people who hired him. Previously it had been unheard of in his market for a concrete contractor to supply his own materials, but the 2004 boom brought increases in rebar and concrete prices and a severe cement shortage. "Formco was positioned as a favorite, so we ended up getting our materials and it clinched our ability to sell the materials on the job because we could actually get the concrete ? and at a much better rate than our customers. That change in environment was huge, and now we're 100 percent supplying materials," Justesen says.
He notes that consistency with materials by using his own suppliers helps in efficiency and solving problems, while the ability to negotiate discounts on materials gives him another avenue for pulling in profit.
An investment in the face of downturn
Justesen's residential business was at a high in the summer of 2007. Most of the company's jobs were in a 50-mile radius around Salt Lake City, and he maintained an 85 percent residential/15 percent commercial balance. But Justesen knew the residential boom wouldn't last forever. He recognized the need to delve further into the commercial sector, a direction his local market had been pushing him in for a few years with an increase in multi-family housing. As the residential market started to crumble across the country, things remained strong in the Salt Lake City market. But Justesen had been following the economy closely, both nationally and locally, and knew all the predictions pointed to a downturn hitting his local residential market while they forecasted gains in commercial.
Where some companies might tighten spending, Justesen decided to make an investment in his company in order to take hold of the opportunity he had in the commercial sector. He hired a salesman to focus on commercial foundation jobs and invested in a new forming system that would make him more competitive when going after commercial foundations. Justesen's Big Panels from B.E.P. Forming Systems are a hybrid between a gang panel and a hand-set panel, offering efficiencies on the job because it doesn't come apart and its panels are larger. The Big Panels also integrate with Justesen's Wall-Ties & Forms aluminum forming system, which he can use in corners and other situations where the Big Panels aren't practical. In addition, Justesen says the panels are thicker and strong than the usual residential aluminum forms, ensuring there is no twisting in high-wall, commercial applications. The panels can also be used in forming elevator shafts.
Justesen says the Big Panels will allow him to compete against the steel rental systems commercial general contractors use. They will also set him apart from other local residential foundations contractors Justesen will be bidding against for commercial jobs.
Currently, Justesen has his Big Panels working on an underground parking project, above-grade elevator shafts and a few residential jobs. Since the panels are new to the company his crews are still getting used to working with them, but Justesen expects the Big Panel system to offer efficiencies and a labor savings. "What we expect to happen is we'll have at least two less guys on a crew with the Big Panels - instead of having seven or eight guys on a crew, we'll have four or five," he explains.
Building the future
With a plan in store for the company's future, Justesen is still looking for ways to diversify and enhance his company, looking to niche markets for possibilities. He recently added rapid material placement services with rock slingers trucks and is looking to team with other contractors in expanding this product in other parts of the country. Formco is also building a new headquarters, which gives Justesen a chance to try out some new products and techniques that the company could someday add to its lineup of services. For instance, Formco's new building will have cast-in-place, insulated concrete walls, and Justesen's crews are exploring decorative concrete applications with vertical and horizontal stamped overlays, stained floors, ground and polished floors, and desks with precast concrete tops. Justesen sees a strong future for decorative concrete. "It's an interesting market because in good times and bad it's going to keep growing because it's a new trend and there are still a lot of new technologies being applied to the market," he says.